It is defined as the ratio of the actual brain mass to the expected brain mass of a typical animal that size, EQ=m(brain)/Em(brain). The formula for the expected mass of the brain varies, but is usually where both masses are in grams, though for some classes of animals the power is 3/4 rather than 2/3.

Roughly speaking, the larger an organism is, the more brain mass is required for housekeeping tasks, such as breathing, thermoregulation, senses, motor skill, etc. The larger the brain is relative to the body, the more brain mass might thus be available for more complex cognitive tasks. This method, as opposed to the method of simply measuring brain mass alone, puts humans closer to the top of the list.

It is a trend that the larger the animal gets, the smaller the relative brain size gets. Large whales have very small brains compared to their weight, and small rodents have huge brains. One explanation could be as an animals gets larger, the size of the neural cells remain the same, and more nerve cells will cause the brain to increase in size to a lesser degree than the rest of the body. This phenomenon has been called the cephalization factor; E = CS2, where E and S are body and brain weights, while C is the cephalization factor.
Just focusing on the relationship between the body and the brain is not enough, one also has to consider the total size of the animal.

However, there seems to be some controversy over whether humans have the highest brain to body mass ratio (followed by Bottlenose dolphins),[1][2][3] or whether treeshrews are on the top of the list[4] Treeshrews hold nearly 10% of their mass in their brain, making it one of the most encephalized animals.[5]

Since shrews are less intelligent than humans, many[How to reference and link to summary or text] believe that intelligence correlates with the absolute brain-mass left over from when one subtracts the brain-mass for running the body. In the essay "Bligh's Bounty",[6]Stephen Jay Gould noted that if one looks at vertebrates with very low encephalization quotients, their brains are slightly less massive than their spinal cords. Theoretically, intelligence might correlate with the absolute amount of brain an animal has after subtracting the mass of the spinal cord from the brain[How to reference and link to summary or text]. This formula is useless for invertebrates because they do not have spinal cords, or in some cases, central nervous systems.